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Popat & Kotecha Property and Ors. Vs. Ashim Kumar Dey - (Supreme Court) (09 Aug 2018)

Municipal taxes would be a part of the "rent" payable by tenant to landlord



Present appeal by special leave by the landlord is against the order passed by the Calcutta High Court. Proceeding were under the West Bengal Premises Tenancy Act, 1997 ("1997 Act") for eviction of the Respondent-tenant on the ground that, the tenant had defaulted in payment of his share of municipal tax as an occupier under the provisions of the Kolkata Municipal Corporation Act, 1980 ("1980 Act"). The application filed by the landlord was dismissed by the learned Trial Court which view has been upheld in appeal by the High Court.

Issue raise in present matter is whether after the amendment of the West Bengal premises Tenancy Act by Amendment Act No. 14 of 2001 with effect from 10th July, 2001 [which had incorporated Sub-section (8) to Section 5] whether a tenant who defaults in payment of his/her share of municipal tax as apportioned by the landlord would be in default of rent rendering him/her liable to eviction.

In the present case, under the tenancy agreement municipal taxes were included in the monthly rent payable and any enhancement thereof was to result in enhancement of the monthly rent also. With the amendment made to the Act with effect from 10th July, 2001 and upon incorporation of Sub-section (8) of Section 5, the obligation to pay municipal taxes as an occupier of the premises fell upon the tenant. The relevant clauses in the rent agreement therefore stood superseded by the statutory obligation cast on the tenant by the amendment to the Act.

The Respondent-tenant nowhere denied in any specific terms that, the share of municipal taxes demanded was disproportionate or excessive or otherwise unauthorized in law. While the provisions of the 1980 Act make it very clear that, an occupier as distinguished from the owner i.e. 'person primarily liable' is entitled to pre-assessment notice and to participate in the assessment proceedings and also to question the same by way of an appeal, etc. assessment of a part of the premises in occupation of a tenant or different parts of such premises in occupation of different tenants is not contemplated under the 1980 Act.

Present Court in Gujarati Education Society and Anr. v. Calcutta Municipal Corporation and Ors. held that, municipal taxes would be a part of the "rent" payable by the tenant to the landlord. From the provisions of Section 230 of the 1980 Act, it is clear that the person to be assessed to tax is the person primarily liable to pay i.e. the owner who is vested with the right to recover the portion of the tax paid by him on behalf of the tenant, if required, proportionately to the extent that the value of the area occupied bears to the value of the total area of the property. Under the 1980 Act, in the event of any default on the part of the owner to pay the tax, the rent payable by the tenant(s) is liable to be attached.

In the present case, default on the part of the Respondent-tenant is clear and evident. The obligation to pay municipal taxes on the tenant being over and above the obligation to pay the rent by virtue of the provisions of Section 5(8) of the 1997 Act, the High Court could not have imposed on the landlord the requirement of obtaining a formal order of enhancement of rent from the Rent Controller. Order of the High Court affirming the order of the learned Trial Court is set aside. Appeal allowed.


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